Reliance Industries (RIL) is planning to form a joint venture with British energy BP to expand its fuel retail business. The new entity will be called Jio-BP and from the present 1,400 petrol pumps that RIL owns, the number will be increased to 5,500 in the next five years.
The joint venture is expected to be formed on the first half of 2020. RIL will hold the lion’s share of 51 percent while BP would have 49 percent share in it. The entity will operate RIL’s existing Indian fuel retail network in addition to its aviation fuel business.
“We believe that together we will bring solutions that will benefit the fast-growing Indian market”, said RIL Chairman Mukesh Ambani.
The agreement was finalised between the two companies on December 16, 2019, after the initial agreement was signed earlier in August. According to RIL, the new retail network will boost India’s fuel marketing and mobility solutions since it conjoins Reliance’s extensive access and customer network through its Jio digital platform and BP’s rich experience in fuel retailing business across the globe. “The joint venture will seek to offer Indian consumers high-quality differentiated fuels, convenience, and services,” said RIL.
Bob Dudley, BP’s group chief executive said that the venture will cater to India’s growing demand for mobility solutions, high-quality fuels, and services. “This major expansion of our business here reinforces our long-term commitment to India,” he said.
In addition to fuels, the joint venture will also offer other services including Castrol lubricants. BP is Castrol’s parent organisation.
BP received its license to market jet fuel in India in January 2016. It acquired the license to set up 3,500 fuel retail outlets in India in October 2016. On the other hand, RIL holds a license to open 5000 fuel outlets and has a market share of 2-3 percent in the fuel retail segment.